Trelleborg: restructuring and consolidation
As part of its strategic and operational action programme Trelleborg continues its restructuring and consolidation process.
Gummiteknik GTM AB
The acquisition of swedish based Gummiteknik GTM AB has been finalised in march. Gummiteknik is a producer of advanced rubber components in short and medium series for the engineering and construction industries, among others - with approximately 30 employees and annual sales of about SEK 36 million.
Closure of UK plant
Trelleborg initiates consultations with the Employee Consultative Committee regarding the closure and transfer of Trelleborg’s operations from West Thurrock, in the UK (employees number approximately 170). The operation in West Thurrock is included in the Fluid & Acoustic Solutions business unit and manufactures polymer-based vehicle components, such as noise-absorbing products.. The investigation on which the decision to call for consultation is based projects that most of the production will be transferred to other of the business unit’s plants in Europe. Production in West Thurrock is expected to continue until year-end 2007. In total, approximately 150 employees are at risk of redundancy.
It is estimated that the costs of the closure of the plant in West Thurrock will amount to about SEK 140 million before tax, most of which will affect cash balances in 2007-2009. Costs will mainly be charged to the result during the first quarter 2007.
Closure of US plant
Dawson Manufacturing Company, in which Trelleborg holds a 45-percent interest, has decided to close a plant in Dawson, Georgia, in the US, and to consolidate production to the company's facility in Benton Harbor, Michigan. The Dawson unit produces antivibration components for the automotive industry and has approximately 100 employees. Production will be successively transferred from Dawson during 2007.
Trelleborg transfers production from North America
Trelleborg is consolidating its industrial tire production to Sri Lanka and will invest in increased production capacity at one of Trelleborg Wheel Systems’ plants in Sri Lanka.
As a consequence of this, it is announced that the production of industrial tires will be terminated and relocated from Trelleborg Wheel Systems’ plant in Hartville, Ohio, in the US. The cost of closure, production transfer and investments will total approximately SEK 130 million over a three-year period.
In Hartville, industrial tires are manufactured for material-handling vehicles such as forklifts. The unit has about 200 employees, of whom about 115 are involved in production. The production will be transferred successively to Sri Lanka in 2008. Production in Hartville is expected to continue until the first quarter of 2009. Subsequently, there will continue to be resources in sales, technical service and distribution in North America.
Trelleborg Wheel Systems currently has two plants in Sri Lanka, in Kelaniya and Biyagama, outside Colombo. The units have approximately 900 employees.
The investment in production in Sri Lanka amounts to about SEK 100 million, of which a large portion is attributable to the production transfer. The costs of closure and relocation of production from Hartville are expected to amount to about SEK 30 million before tax, most of which will mainly affect cash flow in 2007.